Oil Steady; OPEC + sticks to gradual production growth

File Photo: On March 24, 2016, a crude oil storage tank can be seen from above at the Cushing Oil Hub in Cushing, Oklahoma, USA.Reuters / Nick Oxford

September 1, 2021

Stephanie Kelly

New York (Reuters)-Oil prices stabilized on Wednesday after OPEC and its allies agreed to stick to the existing policy of gradual oil production growth.

Brent crude fell 4 cents to settle at $ 71.59 a barrel. US West Texas Intermediate (WTI) crude rose 9 cents to settle at $ 68.59 a barrel.

Brent hit a low of $ 70.42 a barrel, while WTI fell to a low of $ 67.12 a barrel.

Russia-led Organization of Petroleum Exporting Countries and its allies, a group known as OPEC +, will phase out record production cuts by adding 400,000 barrels (bpd) per day to the market starting in July. Agreed to stick to the policy of abolishing. [nL1N2Q30F8]

Still, the group is facing US pressure to revise its 2022 demand outlook and boost production more quickly.

“The impact of the COVID-19 pandemic will continue to introduce uncertainty, but market fundamentals will continue to strengthen and OECD stocks will continue to fall as recovery accelerates,” OPEC + said in a statement.

OPEC + has achieved its goal of removing excess oil from the global market and it is important to balance the market, said Alexander Novak, Russia’s top negotiator.

US gasoline inventories increased 1.3 million barrels last week, according to the Energy Information Agency. Analysts expected a 1.6 million barrel reduction. An increase in coronavirus infections could reduce US demand in the coming weeks, along with a seasonal decline after the summer driving season has declined.

Bob Yogar, director of energy futures at Mizuho in New York, said:

According to the EIA, the surge in gasoline inventories also occurred when the supply of products, an indicator of demand, exceeded 22 million barrels / day for the first time.

US crude oil inventories fell 7.2 million barrels last week to 425.4 million barrels. Analysts expected a 3.1 million barrel reduction.

US crude oil prices are expected to continue to be squeezed as offshore oil and gas production in the Gulf of Mexico gradually recovers. However, analysts said it could take weeks to revive the Louisiana refinery closed by Hurricane Aida.

(Report by Stephanie Kelly in New York, Noah Browning in London, Florence Tan in Singapore, Additional Report by Sonari Paul in Melbourne, edited by Edmund Blair, David Goodman, David Gregorio)

Oil Steady; OPEC + sticks to gradual production growth

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